Kathy YakalFreshBooksThe new FreshBooks is a polished, intuitive online accounting system. It's the best choice for freelancers and sole proprietors, though it still lacks inventory tracking and a few other features from the previous version.

The new FreshBooks is a polished, intuitive online accounting system. It's the best choice for freelancers and sole proprietors, though it still lacks inventory tracking and a few other features from the previous version.

FreshBooks made a bold move in 2017, undertaking a from-scratch overhaul of its popular online accounting service. We caught FreshBooks midway through this major but slow update last year, so its score dropped. A year later, FreshBooks once again provides an exceptional user experience that makes the site easier and faster to navigate, and a pleasure to use. The revamp also improves collaboration. At the time of this writing, however FreshBooks is still missing some reports and inventory-tracking functionality that was included in what the company calls FreshBooks Classic, though most legacy features have finally been restored. The end result is an excellent online invoicing and time-tracking service that is the best choice for freelancers and sole proprietors looking to get control of their books.

FreshBooks Pricing

FreshBooks is available for as little as $15 per month for the Lite plan, which lets you bill up to five clients. For $25 per month, the Plus plan lets you bill 50 clients, and for $50 per month, you can bill as many as 500 clients with the Premium plan. Besides the numbers of clients served, all the plans offer the same features, and you can try a 30-day free trial at any tier, too. FreshBooks is pricey compared to the free Wave, but its usability and tightly focused features make it worth the cost.

Old FreshBooks and New

Unlike Wave, FreshBooks isn't a double-entry accounting service, but freelancers and sole proprietors don't necessarily need an application that's compliant with generally-accepted accounting principles, or GAAP, for short. They will, however, appreciate that its user experience, invoicing, and time-tracking tools are state of the art.

Inventory management, expansive customer records, and numerous reports are just a few of the features available in FreshBook Classic that aren't in the new FreshBooks. These features are expected to migrate over in the future. (Again, this migration has been a very slow process.) Additional upgrades include bank reconciliation, expanded reporting, and additional partner integrations. Current FreshBooks subscribers can choose to continue using FreshBooks Classic or move to the new version, but anyone signing up now automatically gets access to the revamped service.

An Improved UI

The first screen you see after setup is the site's Dashboard, which gives you a quick overview of your company's financial status. There are three charts. Outstanding Revenue tells you who owes you money and who is behind on payments. Total Profit, of course, gives you a real-time number for your current profit or loss; you can change the date range for this graphic. Spending displays your expenses by category. Links to commonly used reports (Accounts Aging, Invoice Details, Time Entry Details, and so on) lie below these graphs. Unfortunately, you can't drill down on these as you can in GoDaddy Bookkeeping.

A vertical pane to the left of the dashboard displays navigational links to the core areas of the site: Invoices, Estimates, Clients, Expenses, Projects, and Time Tracking. Click the link above it, under your company name, and a list of site settings opens. Note that FreshBooks lets you manage multiple businesses. Here you can, for example, contact support, add team members, create item and service records, and see your billing information. You can also set up two connections that are critical to FreshBooks operations. If you enter your login credentials for financial institutions at which you have accounts, FreshBooks connects to their sites and imports your account transactions. And by signing up for FreshBooks Payments or Stripe you can start accepting credit cards.

Click the small bell icon in the upper left, and you get updates about your clients, team members, and other business issues. In the upper right are two drop-down arrows. One, marked Invite, takes you to links for adding employees or contractors to your FreshBooks account. The other, labeled Create New, displays a list of transactions and records you can enter directly from there, including invoices, clients, estimates, and expenses.

Overall, FreshBooks has the simplest, most intuitive screen displays of all the sites we've reviewed recently. It's easier to read at glance than ZipBooks and Kashoo, for example. It can, however, take a while for a user of the old FreshBooks interface to get oriented.

Creating Invoices With FreshBooks

Managing billing and invoicing with FreshBooks is a simple task. Though it's still not double-entry accounting like Less Accounting and other competitors provide, the new FreshBooks is startlingly simple and straightforward.

The choices are all up front, and the first time you create an invoice you probably won't need the Help function to figure out what goes where. You get to the Invoice screen either by using the left-hand side menu choice or from the dashboard by using the Create New button in the upper right-hand corner of the screen. There's really no difference as FreshBooks takes you to the same screen in either case.

As with Intuit QuickBooks Self-Employed, FreshBooks' designers have done a good job organizing features in the software's user interface. The Invoice screen actually contains a lot of information, and there's a toggle where you can view the invoices that you've created, sent, and received, as well as those that have been paid. Those invoices might be charges to you that you want to pass on to a customer by adding them onto an invoice you've yet to create.

You can create invoices in this screen or generate them from an estimate you created earlier. One caveat: fees for FreshBooks are based on the number of clients you designate as active. If you add a new client during the invoicing process and you previously had five active clients (which is the upper limit of the initial pricing tier), you will eventually find yourself being billed at a higher price tier.

You can customize invoices and estimates, but don't expect too much flexibility. You can choose between only two formats and several color schemes, and you have the ability to add a logo or image to the top of the form. However, that's the full extent of FreshBooks' customization capabilities, which is a far cry from packages that focus on customizability, such as Invoice2Go.

One of FreshBooks' excellent features is that, when you click on Invoices Due, you get a list of the invoices in various states. This helps you determine whether a particular invoice is in draft or has been sent. You can even tell if the recipient has viewed the invoice. This lets you check a few days after the invoice is sent and follow up with another email or a phone call if the customer hasn't yet even looked at your invoice. Automatic reminders are available and you can set the interval to wait until this feature is triggered.

Another great feature is the ability to create proposals in addition to estimates. An estimate is essentially a tentative invoice that, when accepted, you can easily convert into an actual invoice. A proposal can be much more detailed, have narrative text and tables, and can span several pages. A proposal can also be used as a statement of work, which when signed, becomes a contract. This is a very rare feature among billing and invoicing applications, but one that comes in handy in many situations.

Your customers can make payments to you by using FreshBooks' own payment function (which is actually rebranded from payment processing service WePay), and costs 2.9 percent plus 30 cents per transaction, which is effectively the industry standard.

Sales taxes are handled easily and you can define several different taxes or tax rates. You add the sales tax to an item by adding a line item and clicking the rate, which gives you the option to add tax. Clicking this option opens a table of available types of taxes and rates, which are completely editable. You can also add as many types of taxes or rates as you need. FreshBooks does not directly integrate with a sales tax service, such as Avalera, but even without this, it manages to handle sales taxes well enough. There's even a Sales Tax Summary report to help you fill out any necessary Sales Tax reports.

Context-Sensitive Content

As you're working on invoices, FreshBooks displays links to context-sensitive settings. This is unique to FreshBooks. Other sites have one giant section of the site on which you define all of its settings. This context-sensitivity is great feature, one that makes the service far more flexible and easy to use. You can, for example, switch to a different invoice style here. You can also make the invoice recur at specified intervals, either automatically or manually.

If you're using any FreshBooks except for Lite, you can have reminders sent at designated intervals and charge late fees, which is unusual in this group of sites. Once you've saved an invoice, you can open it again and edit it, or click the More Actions button for additional tasks, such as emailing the file or applying a payment. You can also click a link to view the invoice's history.

Estimates are new in FreshBooks, though Wave has offered them for a long time. You can create and manage them much like you did invoices.

Contacts and Expenses

FreshBooks' contact records are graphical representations of business cards. They're quite simple; they contain fields for each client's name, mailing and email addresses, and phone numbers. Sites like GoDaddy Bookkeeping allow more detail here. Once you've created a record, it appears in the list on the main Clients page. Click on one, and you see a history of transactions and other interactions. You can drill down on these entries to see the original forms.

If you've connected one or more bank accounts to FreshBooks, you see a list of recent transactions when you click the Expenses tab. FreshBooks tries to automatically categorize these (with choices like Professional Services, Supplies, Meals & Entertainment, Personal, and so on) when it brings them in, but it doesn't always hit the mark. You have to train it at first by correcting inaccurate categories.

Whether you're entering an expense manually or editing one you've imported, you can add or modify a lot of detail. FreshBooks' individual expense records, which look like strips of cash register tape, contain fields for the date, suppliers, items and categories, prices, and taxes. You can attach a file or drag and drop a receipt image, mark the expense as billable to a specific client, change the currency, and designate it as Cost of Goods Sold (COGS). No competitor in this group offers such comprehensive expense records. But it's too bad FreshBooks doesn't estimate quarterly income tax payments, like QuickBooks Self-Employed does.

Simple Project Management Tools

FreshBooks offers richer project-management tools than its competitors. You can give your project a name, assign it to a client or internal staff so they can collaborate and report hours, and enter an hourly budget and end date. You have two billing options: hourly or flat project rate. If you select hourly, you can choose from among a single hourly rate or rates by team member or service.

To specify the services that will be included in the project, you click the Add Service button and type a descriptive name. FreshBooks then creates a list of all the services you've added and displays them when you create a new project. You click the X in the corners of the ones you won't be using for that project.

Now you have to start adding time entries for your project. You have two options here: start and stop a timer, or enter the hours manually by filling out the fields in a small window. You can also grab the bars on a graphical timeline to create a timed task. The Time Tracking page lists all entries and shows hours worked by contributors in the timeline. This data can also be viewed as a bar chart.

You can't specify a project on an invoice, but you can, of course, bill clients for the hours worked. When you select a client in an invoice that has unbilled time, it appears in the list of items that drop down. You click Add to include it on the invoice, and the option to identify these as specific project hours appear there. Both Time Entries and Projects can be automatically converted to invoices.

FreshBooks' Mobile Apps

FreshBooks offers good Android apps and iOS apps mobile apps that are largely similar to each other. In both cases, the FreshBooks app opens to a dashboard that contains three critical charts, as well as additional tools that include Expenses, Time Tracking, Clients, Estimates, and Invoices. You can view existing data and create new entries using the apps, too. Once you've sent an invoice, you'll be able to see if it's been viewed or paid or is overdue, and exchange messages with customers.

Reclaiming the Prize

If you've never used FreshBooks before, you shouldn't have too much trouble learning how the new version works (though the crossover between Projects and Time Entries can be confusing at first). FreshBooks' design is exceptional and its navigation tools intuitive. We recommend you check with the company before switching from FreshBooks Classic, though, to make sure your must-have features are there.

The Editors' Choice for accounting for freelancers was a very tight race this year between Wave and FreshBooks. Wave offers features that FreshBooks doesn't, like customer statements, standard financial reports, payroll, and a double-entry accounting framework. But freelancers and independent contractors don't necessarily need these. What they need is the best invoicing and time-tracking tools, expense-management and client records, and basic reporting available. They need to get in and out of the site quickly to do their work, and it wouldn't hurt if the site's user interface and navigation tools were best in class. FreshBooks offers all that and more to win this years' top honors.

While FreshBooks is an exceptional choice for freelancers and independent contractors, it lacks a lot of functionality that larger, more complex businesses need. Once again this year, QuickBooks Online wins our Editor's Choice for small business online accounting.

FreshBooks

excellent

Bottom Line: The new FreshBooks is a polished, intuitive online accounting system. It's the best choice for freelancers and sole proprietors, though it still lacks inventory tracking and a few other features from the previous version.

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About the Author

Kathy Yakal has been annoying computer magazine editors since 1983, when she got her first technology writing job because she tagged along with her ex-husband on a job interview. She started freelancing and specializing in financial applications when PCs became financial tools for consumers and small businesses (after a stint at a high-end accounti... See Full Bio

More From Kathy

Ted Needleman has been covering the world of technology for almost 40 years. He writes frequently on software, hardware, and technology-related subjects. He has been a programmer, accountant, Editor-in-Chief of Accounting Technology magazine, and the director of an imaging and printing test lab. He has been performing reviews for PCMag since the 19... See Full Bio

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